CAMBRIDGE, Mass., June 1, 2020 /PRNewswire/ -- HubSpot,
Inc. ("HubSpot") (NYSE: HUBS) today announced its intention to
offer, subject to market conditions and other factors, $400
million aggregate principal amount of Convertible Senior Notes
due 2025 (the "notes") in a private offering (the "offering") to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"). HubSpot also expects to
grant the initial purchasers of the notes an option to purchase up
to an additional $60 million aggregate principal amount
of notes (the "additional notes").
The notes will be senior, unsecured obligations of HubSpot,
and interest on the notes will be payable semi-annually in arrears.
The notes will be convertible into cash, shares
of HubSpot's common stock or a combination thereof,
at HubSpot's election. The interest rate,
conversion rate and other terms of the notes are to be determined
upon pricing of the offering.
In connection with the pricing of the
notes, HubSpot expects to enter into privately negotiated
capped call transactions with one or more of the initial purchasers
of the notes or their affiliates or other financial institutions
(the "option counterparties"). The capped call transactions are
expected generally to reduce potential dilution to HubSpot's common
stock upon conversion of any notes and/or offset any potential cash
payments HubSpot is required to make in excess of the principal
amount of converted notes, as the case may be, with such reduction
and/or offset subject to a cap.
HubSpot expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates will purchase shares
of HubSpot's common stock and/or enter into various derivative
transactions with respect to HubSpot's common stock concurrently
with or shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of HubSpot's common stock or the notes at that time.
In addition, HubSpot expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
HubSpot's common stock and/or purchasing or selling HubSpot's
common stock or other securities of HubSpot in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so on each exercise
date for the capped call transactions, which are expected to occur
on each trading day during the 30 trading day period beginning on
the 31st scheduled trading day prior to the maturity date of the
notes, or following any termination of any portion of the capped
call transactions in connection with any repurchase, redemption or
early conversion of the notes). This activity could also cause a
decrease or avoid an increase in the market price of HubSpot's
common stock or the notes, which could affect the ability of
noteholders to convert the notes and, to the extent the activity
occurs following a conversion or during any observation period
related to a conversion of notes, it could affect the amount and
value of the consideration that noteholders will receive upon
conversion of such notes.
HubSpot intends to use a portion of the net proceeds from
the offering of notes to pay the cost of the capped call
transactions. If the initial purchasers exercise their option
to purchase additional notes, HubSpot expects to use a portion of
the net proceeds from the sale of the additional notes to enter
into additional capped call transactions with the option
counterparties. HubSpot intends to use the remainder of the net
proceeds from the offering of notes to fund the cash portion, if
any, of the consideration used to finance any repurchases or
exchanges of a portion of HubSpot's 0.25% Convertible Senior Notes
due 2022 (the "2022 notes") described below and for working capital
and other general corporate purposes, which may include potential
acquisitions and strategic transactions. From time to time, HubSpot
evaluates potential acquisitions and strategic transactions of
businesses, technologies or products. However, HubSpot has not
designated any specific uses and has no current agreements with
respect to any material acquisition or strategic transaction. These
intentions are subject to change.
Contemporaneously with the pricing of the notes, HubSpot expects
to enter into one or more separate and individually negotiated
transactions with one or more holders of the 2022 notes to
repurchase or exchange a portion of the 2022 notes on terms to be
negotiated with each holder (each, a "note repurchase"). The terms
of each note repurchase are anticipated to be individually
negotiated with each holder of 2022 notes and will depend on
several factors, including the market price of HubSpot's common
stock and the trading price of the 2022 notes at the time of each
such note repurchase. No assurance can be given as to how much, if
any, of these 2022 notes will be repurchased or exchanged or the
terms on which they will be repurchased or exchanged. The
consideration for any such note repurchases may include cash,
shares of HubSpot's common stock, or a combination thereof.
HubSpot expects that holders of the 2022 notes that sell or
exchange their 2022 notes as described above may enter into or
unwind various derivatives with respect to HubSpot's common stock
(including entering into derivatives with one or more of the
initial purchasers in the notes offering or their respective
affiliates) and/or purchase or sell shares of HubSpot's common
stock concurrently with or shortly after the pricing of the notes.
This activity could affect the market price of HubSpot's common
stock and the initial conversion price of the notes.
In connection with the issuance of the 2022 notes, HubSpot
entered into convertible note hedge transactions (the "existing
convertible note hedge transactions") with certain financial
institutions (the "existing counterparties"). HubSpot also entered
into separate warrant transactions (the "existing warrant
transactions") with the existing counterparties. To the extent
HubSpot effects note repurchases, HubSpot intends to enter into
agreements with the existing counterparties to terminate a portion
of: (i) the existing convertible note hedge transactions in a
notional amount corresponding to the principal amount of 2022 notes
repurchased or exchanged and (ii) the existing warrant transactions
with respect to a number of shares equal to the notional shares
underlying such 2022 notes repurchased or exchanged. In connection
with such terminations and the related unwinding of the existing
hedge position of the existing counterparties with respect to such
transactions, such existing counterparties and/or their respective
affiliates may sell shares of HubSpot's common stock in secondary
market transactions, and/or unwind various derivative transactions
with respect to HubSpot's common stock concurrently with or shortly
after the pricing of the notes. In connection with such
terminations, HubSpot anticipates that it will receive cash from
the existing counterparties, which HubSpot intends to use for
general corporate purposes.
The repurchase or exchange of the 2022 notes and the unwind of
the existing convertible note hedge transactions and the existing
warrant transactions described above, and the potential related
market activities by holders of the 2022 notes participating in the
note repurchases and the existing counterparties, as applicable,
could increase (or reduce the size of any decrease in) or decrease
(or reduce the size of any increase in) the market price of
HubSpot's common stock, which may affect the trading price of the
notes at that time and the initial conversion price of the notes.
HubSpot cannot predict the magnitude of such market activity or the
overall effect it will have on the price of the notes or HubSpot's
common stock.
The notes will only be offered to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. Neither the notes nor the shares of HubSpot's
common stock potentially issuable upon conversion of the notes, if
any, have been, or will be, registered under the Securities Act or
the securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About HubSpot
HubSpot is a leading growth platform. Since 2006, HubSpot has
been on a mission to make the world more inbound. Today, over
78,700 total customers in more than 120 countries use HubSpot's
award-winning software, services, and support to transform the way
they attract, engage, and delight customers. Comprised of Marketing
Hub, Sales Hub, Service Hub, CMS Hub, and a powerful free CRM,
HubSpot gives companies the tools they need to Grow Better.
Cautionary Language Concerning Forward-Looking
Statements
This press release includes certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including, but not limited to, statements regarding the
proposed terms of the notes, the size of the notes offering,
including the option to purchase additional notes, whether HubSpot
will enter into and the extent, and potential effects, of the
capped call transactions, the note repurchases and the terminations
of a portion of the existing convertible note hedge transactions
and the existing warrant transactions, the potential dilution to
HubSpot's common stock and the expected use of the net proceeds
from the sale of the notes and the terminations of a portion of the
existing convertible note hedge transactions and the existing
warrant transactions.
These forward-looking statements include, but are not limited
to, plans, objectives, expectations and intentions and other
statements contained in this press release that are not historical
facts and statements identified by words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates"
or words of similar meaning. These forward-looking statements
reflect HubSpot's current views about its plans, intentions,
expectations, strategies and prospects, which are based on the
information currently available to HubSpot and on assumptions
HubSpot has made. Although HubSpot believes that its plans,
intentions, expectations, strategies and prospects as reflected in
or suggested by those forward-looking statements are reasonable,
HubSpot can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those
described in the forward-looking statements and will be affected by
a variety of risks and factors that are beyond HubSpot's control
including, without limitation, risks related to or associated with:
whether HubSpot will consummate the offering of notes on the
expected terms, or at all, whether HubSpot will consummate the
anticipated note repurchases, the related terminations of a portion
of the existing convertible note hedge transactions and the
existing warrant transactions and the terms thereof and whether
HubSpot will enter into capped call transactions, the terms thereof
and whether such capped call transactions become effective, all of
which could differ or change based upon market conditions or for
other reasons; the impact of COVID-19 on HubSpot's business and the
broader economy; HubSpot's history of losses; HubSpot's ability to
retain existing customers and add new customers; the continued
growth of the market for an inbound platform; HubSpot's ability to
differentiate its platform from competing products and
technologies; HubSpot's ability to manage its growth effectively to
maintain its high level of service; HubSpot's ability to maintain
and expand relationships with its solutions partners; HubSpot's
ability to successfully acquire and integrate companies and assets;
HubSpot's ability to successfully recruit and retain
highly-qualified personnel; the price volatility of HubSpot's
common stock; and other risks set forth under the caption "Risk
Factors" in HubSpot's SEC filings. HubSpot cautions you not to
place undue reliance on any forward-looking statements, which speak
only as of the date they are made. HubSpot assumes no obligation to
update any forward-looking statements contained in this press
release as a result of new information, future events or
otherwise.
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SOURCE HubSpot